The Senate appropriations committee is advancing an idea that could take a large amount of unique dollars the state holds onto and turn it into revenue.
Those unique dollars are called unclaimed property.
It’s basically abandoned money that banks transfer to the state after three years. By law, the state must return those dollars—meaning it’s a liability.
Right now, there’s a lot of those dollars — $1.2 billion worth.
“There’s just so many unknowns with this that it’s time that we set the money aside, let it start earning interest. We can benefit from that interest and offset that liability," said Republican State Sen. Taffy Howard—the prime sponsor of the idea to create an unclaimed property trust fund.
Some of that $1.2 billion state lawmakers can reliably spend.
This year, the state is looking to spend about $60 million of that money. Howard's idea is to wean the state off spending those dollars, while setting them up to generate revenue down the road.
“The idea is to create this trust fund to alleviate the perpetual liability that we’re facing," Howard added.
It’s an idea that’s included input from the state treasurer — who manages unclaimed property payouts, the governor’s office and state lawmakers.
Officials estimate the state could generate about $45 million in interest by fiscal year 2045.
But, Lt. Gov. Tony Venhuizen said that won’t happen right away.
“We’ve structured this in a way that will phase it in over time, phase it out as a revenue source, and build up the trust fund to smooth out the path so eventually the interest on the trust fund will replace the revenue we’re getting every year.”
Sen. Howard and others are also looking to ask voters to establish the trust fund in the constitution. That would allow the state investment council manage the money, as opposed to letting the dollars just generate interest.
